Fed Notes Reveal Deteriorating Outlook: Lower Growth, Fewer Jobs

The Fed cut its projections for economic growth this year, citing a plunging housing market, sky-high commodity prices, and growing inflation. Despite the gloomy outlook, however, the notes gave no indication that more rate cuts would be forthcoming, and characterized last month's decision to cut rates as a "close call." AP:

"Most members viewed the decision to reduce interest rates at this meeting as a close call," the documents revealed. "Although downside risks to growth remained, members were also concerned about the upside risks to the inflation outlook, given the continued increases in oil and commodity prices."

Under its new economic forecast, the Fed said it now believes gross domestic product will grow between just 0.3 percent to 1.2 percent this year. That's lower than a previous Fed forecast, released in late February, that estimated growth to be between 1.3 percent and 2 percent.

The Fed also predicted that both the unemployment rate and inflation would rise to as high as 5.7% and 3.4% respectively, higher than its previous assumptions of 5.3% and 2.4%.